Technology stocks have been hot this year. And excellent earnings are expected when big companies start reporting this week.

Given the momentum and aggressive buying by the momo (momentum) crowd, expectations are widespread that earnings will be the catalyst for another leg up in popular tech stocks.

My longtime readers have been asking about what the smart money is doing ahead of earnings. In my view, this is the right line of inquiry for prudent investors. The smart money — professional investors — pays attention to both risk and reward. The momo crowd is often oblivious to risks.

Some of the up move is a short squeeze, as shown on the chart. During the recent downturn in the stocks, those who sold short are now being forced to buy to cover. The buying by shorts is adding fuel to the fire on the upside.

The table also shows the rank of the FAAMG stocks based on a proprietary algorithm of The Arora Report. Please note that Apple has now slipped to No. 2 from No. 1, switching places with Facebook.

Disclosure: Subscribers to The Arora Report may have positions in the securities mentioned in this article or may take positions at any time. All recommended positions are reviewed daily at The Arora Report.

Nigam Arora is an investor, engineer and nuclear physicist by background, has founded two Inc. 500 fastest-growing companies, is the developer of the adaptive ZYX Global Multi Asset Allocation Model and the ZYX Change Method to profit from change in trading and investing. He is the founder of The Arora Report, which publishes four newsletters. Nigam can be reached at Nigam@TheAroraReport.com.

Nigam
Arora

Nigam Arora is an engineer, nuclear physicist, author, and entrepreneur and the founder of two Inc. 500 fastest growing companies. He is also the developer of the ZYX Change Method to profit from change by investing. The premise is that most money is made by predicting change before the crowd. Arora is the chief investment officer at The Arora Report and the editor of four newsletters that track the ZYX Change Method. Nigam can be reached at Nigam@TheAroraReport.com

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Nigam
Arora

Nigam Arora is an engineer, nuclear physicist, author, and entrepreneur and the founder of two Inc. 500 fastest growing companies. He is also the developer of the ZYX Change Method to profit from change by investing. The premise is that most money is made by predicting change before the crowd. Arora is the chief investment officer at The Arora Report and the editor of four newsletters that track the ZYX Change Method. Nigam can be reached at Nigam@TheAroraReport.com

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